Admiral sets range for biggest flotation this year

Admiral, the UK motor insurer, yesterday confirmed plans to float on the London market later this month, announcing an indicative price range of between 245p and 300p, valuing the company at between £634m and £776m.

Admiral, the UK motor insurer, yesterday confirmed plans to float on the London market later this month, announcing an indicative price range of between 245p and 300p, valuing the company at between £634m and £776m.

The float, which is being handled by the US investment bank Merrill Lynch, will be the UK's largest this year and only the eighth on the main London market in 2004.

Thirty-two per cent of the company's share capital will be floated, generated by the partial sale of stakes by Barclays Private Equity, XL Capital and the employees of Admiral.

Admiral's 1,500 staff own 47 per cent of the company, and are set to receive an average windfall of about £37,000 from the initial public offering.

Admiral said it would commit to a progressive dividend policy, paying out no less than 40 per cent of its post-tax profits to shareholders. It said the company would also return excess cash to shareholders over time but would not be raising any capital through the IPO.

The group began an institutional investor roadshow yesterday. It plans to price its shares on 23 September, with unconditional dealing scheduled to begin five days later.

Henry Engelhardt, Admiral's chief executive , said: "Through our focus on fast-growing internet distribution, Admiral is well-positioned to achieve its strategy of increasing its share of the private motor insurance market while maintaining cash generation and profitability under the intermediary model it has built."

The IPO will represent a healthy payday for the group's venture capital backers, who include Munich Re, as well as Barclays and XL. The consortium backed a management buyout of the group, led by Mr Engelhardt in 1999.